A salaried employee is paid based on an annual rate of pay, irrespective of the number of hours actually worked. For example, if a person has a $70,000 salary and he is paid once a week, then the gross amount of each of the 52 paychecks he receives during the year is $1,346 ($70,000 / 52 weeks).

A salaried employee is not paid overtime, but also does not experience a pay cut for working a reduced number of hours. The type of person who is classified as a salaried employee is typically a self-directed person in the administrative side of a business, such as the controller, sales manager, or president.